The Trump administration reinstated all sanctions removed under the
2015 nuclear deal, targeting both Iran and states that trade with it.
They will hit oil exports, shipping and banks - all core parts of the economy.
Thousands of Iranians chanting "Death to America" rallied on Sunday, rejecting calls for talks.
Iranian President Hassan Rouhani has vowed to sell oil and break the sanctions.
The
military was also quoted as saying it would hold air defence drills on
Monday and Tuesday to prove the country's capabilities.
The demonstrations took place on the 39th anniversary of the
occupation of the US embassy in Tehran, which led to four decades of
mutual hostility.
Before travelling to a campaign rally for the
US mid-term elections, President Donald Trump said Iran was already
struggling under his administration's policies.
He called
the sanctions, "very strong", saying: "We'll see what happens with
Iran, but they're not doing very well, I can tell you."
What started this?
Washington re-imposed the sanctions after Mr Trump in May pulled out of a 2015 accord aimed at curbing Iran's nuclear ambitions.
Washington also says it wants to stop what it calls Tehran's "malign" activities including cyber attacks, ballistic missile tests, and support for violent extremist groups and militias in the Middle East.
"We are working diligently to make sure we support the Iranian people
and that we direct our activity towards ensuring that the Islamic
Republic of Iran's malign behaviour is changed," US Secretary of State,
Mike Pompeo, told Fox News on Sunday.
"That's the goal, that's the mission, and that's what we will achieve on behalf of the president."
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